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PepsiCo Multiples Valuation


This time around I decided to change industries completely from big-tech to food and beverages. I was eating a bag of Cheetos while thinking of which company I should do my next valuation for and then it came to me. Let's do PepsiCo. 

For the comparable companies, I decided to use Coca-Cola, Dr-Pepper, Monster Energy, Nestle, and National Beverage Corp. ( mainly known for manufacturing La Croix). It's obvious that Pepsi's biggest competitor in the soft drink market is Coca--Cola, so it makes sense that Coke would be my first choice. Dr-Pepper is also a rather prominent soft drink brand in the world, so I chose it as another competitor to compare Pepsi with. Monster Energy, even though it is known for making energy drinks, is still big in the beverages industry, thus a perfect choice to chose as a competitor to compare Pepsi with. On the other hand, Nestle is a much more balanced competitor with Pepsi, as it competes with Pepsi in terms of both food and beverages. Whether it be competition in the breakfast game, water, among other things. Despite being a rather obscure company, National Beverage Corp has a game changer with La Croix that serves as a strong competitor to Pepsi's beverage offering. 

Multiples Valuation

As we can see with this analysis, PepsiCo's stock is currently undervalued, as the fair value of the company is $161, which is decently higher than the current stock price of  $142.35. The process for doing this analysis is straightforward. I used Yahoo finance and annual reports of all the relevant firms to copy the values onto Excel. 

For my next blog, I will do one last multiples valuation.


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